Sapient Global Markets, in collaboration with Die Welt, has launched new certificate provider rankings for issuers of structured products in the German market.
The rankings show a shift in how information is provided to the retail investor with new channels to access information, increase client service and provide a transparent environment around the products available.
Structured products, also referred to as warrants or certificates, have become popular in a number of German-speaking countries including Germany, Austria and Switzerland. With over one million instruments traded in the German market, retail investors can select from an array of derivative structured products based on equities, commodities, interest rates or currencies. In this expansive marketplace, retail investors are demanding detailed information on each product available.
The 2013 rankings include 20 certificate providers that cover 98 per cent of the German speaking market. From April to June 2013, product and risk transparency as well as information services were tested with emails, phone calls as well as a thorough investigation of the issuers product pricing policy and product platforms.
Overall, DZ Bank finished first in the issuer study on service quality with a score of 89.90 out of a possible 100 points. DZ Bank was followed by Goldman Sachs, LBB, HSBC Trinkaus and BNP Paribas.
“Today’s retail investor must think about affordability and risk tolerance for the products they are investing in. The channels that issuers are providing to help educate retail investors continue to evolve with each passing year and investors are asking for detailed information available at their fingertips,” says Stefan Naumann, director, Sapient Global Markets. “This year’s rankings shows a true increase in information available to the retail investor across product information, web portal and transparency and overall client service.”
As of 2011, issuer Product Information Sheets (PIB) have been required by law to clearly display the principal opportunities and risks of structured products. While there are still issuers who decline to offer customers comprehensive information about their structured products, such cases are rare. As part of this year’s rankings, a selection of each issuer’s PIB was tested for completeness and accuracy of content and clarity of the text. In the 2013 rankings, Goldman Sachs has risen to the top spot within this category with a rating of 17.32 out of 20 points. This represents a significant jump from 2012 where Goldman Sachs ranked 20th out of 21 in this category of the benchmark study.
As client service for retail investors continues to improve, web-based portals are evolving as an essential source of information on structured products. Issuers have become much more transparent by offering new tools through mobile and tablet-based applications. In the 2013 rankings, DZ Bank ranked first for the second year in a row with a score of 38.76 out of 40 points by providing access to detailed information across new channels to reach customers.
Response to client inquiries through email and telephone channels was also measured. The rankings evaluate the comprehensibility and accuracy of specific products based on responses from each issuer. In 2013, LBB ranked first for the second year in a row in response management with a score of 39.91 out of 40 points.